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The “Worst Scenario” Predicted by Wall Street Stock Experts

Wall Street experts have warned that the stock market, which has been declining for the seventh straight week, could worsen as concerns about the recession grow.

Recession as major retailers warns that inflation is squeezing profits and the Federal Reserve has declared that it will continue to raise interest rates “without hesitation” until soaring prices fall. Concerns about the Fed are rising sharply.

Meanwhile, Deutsche Bank’s chief strategist for global strategy, Binky Chada, predicted in a recent memo that “if the economy goes into recession in the near future, the S & P 500 Index will plummet to 3,000.” This means a 24% drop from the current 3900.

Chada has set the S & P 500’s target price at 4750, which is 20% higher than it is today, and predicts a “bailout rally” by the end of the year, but warns of the risk of a prolonged decline in the market-leading to recession.

David Kostin, a US equity strategist at Goldman Sachs, said a recession would further increase stock market losses, with a 35% chance of a recession within the next two years.

According to him, the S & P 500’s decline rate in the 12 recessions since World War II was a median of 24% and an average of 30%. Based on this pattern, Kostin predicted in a recent note that the stock market could fall another 11% to 18% from current levels.

Meanwhile, Bank of America strategists have warned of the arrival of stagflation, a combination of slowing growth and high prices, which could lead to the “worst scenario” of the S & P 500 dropping by about 18% to 3200. It pointed out.

Inflation has proven to be slow to end, and eight out of eleven (about 73%) of the Fed’s past rate hikes aimed at curbing inflation have led to a recession. The Fed recognizes this risk.” said Deutsche Bank’s Chada.

The recent market decline, coupled with the Fed’s outlook for aggressive rate hikes, “has heightened fear of a recession,” said Mark Zandy of Moody’s Analytics.

He is more pessimistic about the odds of a future recession than his peers, with 33% in 12 months and nearly 50% in 24 months.

Bank of America strategist Sabita Subrahmanyan warned investors late last year, saying that “the risk of a recession dominates the market.

The current market environment is very similar to the era of the dot-com bubble in 2000, not only because of the increased likelihood of stagflation, but also because investors are more likely to “accept what is normally unthinkable.

It is said that the situation is very similar to that of.